What does child support cover in Australia? A guide

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An overview of child support in Australia, different payment options, and legal requirements for parents.
Australia Family and Matrimonial
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Child support can be a confusing matter to many parents contemplating either a separation or divorce. Child support systems in Australia are designed to ensure that the children receive financial assistance from both parents no matter the living situation.

This guide aims to give an overview of what child support is, different payment options, and legal requirements that parents must be aware of.

At Unified Lawyers, we will help you through the process, providing clear and comprehensive advice on the way forward.

What Is Child Support Supposed to Cover?

Getting child support in Australia is meant to consider various costs associated with bringing up a child. Amongst these are basic requirements for child maintenance including food, clothing and shelter.

Child support is also intended to cater for education and medical expenses. It is to maintain the standard of living that would normally be there if the parents were together.

Comparative Costs of Living:

This involves the necessary expenses of providing clothing, food, and shelter for children. Under Australian laws, child support payments are obligatory to ensure that children have a safe and healthy living environment.

This comprises of appropriate housing, nutritious food, and clothing, all of which contribute to their physical and emotional well-being. The aim is to create a safe, stable and supportive environment at home where children can thrive.

Medical Expenses:

Child support caters to a child's routine medical expenses, which include regular visits to the doctor, dental care, and other medical treatments that they may need. Children should have access to healthcare services to keep their health and well-being.

This on- going support ensures that medical costs, including prescription medications, vaccinations, and specialist consultations, are feasible for the custodial parent.

It should also be noted that the Australian government also provides Medicare, which can be used alongside child support to cover many of these expenses.

Educational Costs:

Education is a fundamental right for children, and child support always prioritises access to schooling. This category includes covering school fees, books, uniforms, and other correlated expenses.

The Australian education system, reinforced by child support payments, entitles children to all the necessary resources to succeed academically.

This also covers extracurricular educational activities, such as tutoring or special educational programs, which uplift a child's learning experience and academic performance.

What Australian Child Support Does Not Cover

As much as child support covers most aspects of life, certain aspects of this will not generally be incorporated. Some examples of those are:

Private School tuition:

Standard child support payments may not cover private school tuition unless it is specifically included in a child support agreement.

In Australia, the Child Support (Assessment) Act 1989 allows parents to make agreements that include additional expenses, such as private school fees. These agreements must be in writing and signed by both parties to be enforceable.

If private school tuition is a priority, you should have this explicitly stated in the child support agreement to allow for coverage.

Extracurricular Activities:

Standard Child Support payments are determined in consideration of a formula which looks at both parent's income, their living arrangements and gives consideration to the average costs of raising a child in Australia. As such, it cannot have consideration for the specific extracurricular activities where a parent may choose to enrol their child into.

According to Australian child support guidelines, parents can agree to cover specific high-cost extracurricular activities separately.

These activities, can include overseas trips, specialised camps, or extensive sports training programs, should be detailed in a child support agreement so both parties are clear on their financial responsibilities.

Unlimited Medical Services:

Child support payments overall cover reasonable medical costs for children, including regular check-ups, vaccinations, and minor medical treatments.

However, if a child incurs very high medical expenses, such as those related to chronic illness or significant medical procedures, there may be a need for additional agreements.

Under Australian law, parents can request a variation in child support assessments to cover extraordinary medical expenses. This means that children can receive the necessary medical care without placing an undue financial burden on either parent.

Personal Parental Expenses:

It is important to note that child support payments are strictly intended for the child's needs and cannot be used for the personal expenses of the receiving parent. All funds provided through child support go directly toward the child's well-being.

This includes their living expenses, education, medical care, and extracurricular activities. Misusing child support funds for personal expenses is not permissible under Australian law, and doing so can lead to legal consequences.

Non-Agency and Prescribed Payments

When a Child Support Assessment is done, it is important to know that the amount assessed may not be the amount that the payee parent will receive.

There are two other main forms of payments which child support Australia may credit against the child support assessment amount: non-agency payments and prescribed non-agency payments.

For parents, being informed and understanding the difference between the two, leaves both parents in a better position to deal with such financial obligations in a more streamlined manner.

Non-Agency Payments

Non-agency payments are agreed payments between the parties that may have either been directly paid to the receiving parent or even paid directly to a third party. These might include payments towards items such as food, shelter, transport, education, health or extracurricular activities.

These are typically much more flexible and can cover a much wider variety of things that money can go towards, but at the same time, they require agreement from both parties.

Prescribed Non-Agency Payments

Some forms of payments, similar to those noted above, can be considered by the child support agency to be credited against the paying parent's liability, even in circumstances where the other parent does not agree. These are called prescribed non-agency payments.

The child support agency can only consider these expenses in circumstances where the paying parent has less than 14% of care for the child. The child support agency can only credit these payments for up to 30% of the paying parent's liability.

What is the Maximum Child Support in Australia?

There is no set maximum amount of child support; rather, it depends on other considerations.

In Australia, the amount of funds payable is determined by a very accurate child support calculator. The formula first considers the incomes of both parents, the number of children, and the children's time division between the parents.

However, the Department of Human Services provides an online child support assessment estimator, which may help parents to figure out their obligations.

Child support payments will be relative based on how high your income is, yet the formula is intended to assure fair and proportionate support in relation to the needs of the children and the ability of the parents to pay.

Here is an example case study with detailed information about how child support scales with income in Australia:

Case Study Example: High-Income Earner and Child Support

Background: John and Sarah have two children, aged 10 and 12. They separated two years ago, and Sarah has primary custody of the children, with John having them on weekends. John is a successful entrepreneur, earning between $500,000 and $1 million per year, while Sarah works part-time, earning $60,000 annually.

Child Support Calculation:

In Australia, child support is calculated based on both parents' incomes, the number of children, and the percentage of care each parent provides. The formula aims to balance the financial responsibilities between both parents.

Basic Formula: The basic formula considers:

  • Each parent's adjusted taxable income.
  • The cost of raising children based on a percentage of combined parental income.
  • The percentage of care each parent provides.

Child Support and Special Circumstances

Child support may be influenced by special circumstances in the event that a child has special needs, which will likely be more demanding of support, such as the support of a fully disabled child or if a parent earns very high income.

In such a case, the parents have authority to apply for exemption from the ordinary assessment in their circumstance.

Unified Lawyers can help assist in negotiating these difficult circumstances and ensure child support arrangements Australia are fair and adequate.

Does Child Support Vary By State in Australia?

Child support laws and the calculation of payments are consistent across Australia, governed by federal legislation, primarily the Child Support (Assessment) Act 1989. Services Australia administers the scheme, allowing uniformity in how child support is assessed and enforced nationwide.

Child support covers the same items nationwide. For example, your child support requirements will be the same whether you live in NSW, Victoria, Queensland or any other state or territory within Australia.

Frequently Asked Questions (FAQ's)

Can parents reach a private agreement as to what child support should be paid?

In Australia, there are two kinds of child support agreements; limited child support agreement, and binding child support agreements. Limited agreements are more flexible and can quickly be changed, with less complexity than Binding Child Support agreements that legally bind the concerned parties and require each party to obtain advice from a legal practitioner before signing.

What happens if my ex does not pay the entire amount of child support?

Where a parent demands full payment of the budgeted child support but has not obtained it, they are required to contact the Child Support Agency, where several recovery measures are put in place, such as garnishing salaries or interception of the tax return.

You can find out more about this in our article resources here.

Is child support tax deductible?

Child support payments are not tax deductible for the paying parent in Australia, and they do not count as a tax for the receiving parent. This is in order to ensure that enough support is given out to the child.

Learn more about whether or not child support is tax deductible.

When do I stop paying child support?

Child support is usually ongoing until a child reaches 18 years of age, child support may extend if a child continues to attend school or terminate earlier if a child becomes financially independent or gets married.

For more information about when to stop paying child support click our helpful resource here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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